Monday, August 3, 2015

8/3/15 Fundamental underpinnings of the economy are looking ok except wages

Total vehicle sales remain strong

The growth is slowing down, unsurprisingly as sales are near record highs.  Chart is yoy change

Total construction spending is strong

Total bank credit is expanding at a healthy 7 to 8% a year (chart is yoy change)

And along with it the broadest measure of money supply is going along at a respectable pace

New single family home sales are ok but could be better.  They would be if prices were lower but the FRB has done its very best to keep prices high

Wages are a problem.  I don't expect much improvement here.  Ever.  You can see before the great credit expansion wages grew rapidly.  It very may well be that this growth is why off shoring became such a prominent policy.  Now it looks like wage growth is at another new low.
The only hope I have regarding wage growth is that we don't get into a growing under class the way liberals want us to have.  The only solution offered to inequality is to subsidize the middle class.  And to import tens of millions more Mexicans.

Overall income is decent

And consumer spending is just fine

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